The perfect blend

John Watson talks to Laurent Schonbach and Ashley Cole about mixing up the right combination for clients

Some things are simply better together. Cranberry juice and vodka are great on their own, but adding them together into a Cosmopolitan cocktail makes an excellent combination. Add a garnish of a slice of lime or even a colourful umbrella and you’ve created something that really grabs attention.

Now Hiscox can add the combination of household insurance with added motor and/or holiday home cover as another example of a perfect blend. These complementary covers are bringing big opportunities for brokers to widen the scope of business from their high net worth clients. And, in Ashley Cole and Laurent Schonbach, Hiscox has the perfect partnership to help brokers get it right.

Ashley runs the private motor book and Laurent the holiday home account. Both are working with brokers to help them increase their income and cement ties with clients through cross-selling.

Laurent says: “About 15% of our household customers also own a holiday property abroad. Typically, most will insure in the local market and in the local language, as many don’t realise that you can buy insurance in the UK for an international property. But this is premium income that could equally be coming through your brokerage, so part of the broker’s job is to educate them about this.”

Ashley agrees: “We want to insure individuals who typically have two quality cars on the driveway for everyday use and another tucked away in the garage. In addition, we want to insure the vehicles of our 606 clients in consideration of the fact that they may not all choose to drive high-value luxury cars.

“At the moment, they may be insured direct or through an aggregator, not because the client is particularly price-driven but simply because no one has told them there is another way. Our clients don’t know what they don’t know – they deserve to be told.

“We and our brokers have to work to explain to clients that there is a choice,” he continues. “Just as you can choose to pay for a five-star hotel over a three-star hotel, so you can choose to pay more for insurance that also provides added value. An audience that buys Armani clothes over M&S is very receptive to this type of message.”

Done well, cross-selling works for everyone in the relationship. Hiscox gains volume, brokers can boost their income and the customer gets a better service and wider cover.

“From a customer’s point of view, there are clear advantages to insuring both their holiday home and their main property through a UK broker,” says Laurent. “They can deal with the policy, the quotation and any claim in English, via an English-speaking broker and an English-speaking insurer, so there is far less room for misunderstanding. Also, they are dealing with a broker that they trust and an insurer that they know.”

Similar consumer benefits apply when you add in motor cover. Ashley says: “Having a single bill, with a single monthly Direct Debit and single renewal date makes life easier for the client. There are no gaps in the cover and no danger of the classic ‘inter-insurer wrangle’ over liability, for example if personal possessions are stolen from a car.”

From a broker’s point of view, cross-selling is a chance to greatly increase income from the same customer base. Ashley explains: “The average motor client would typically pay about £2,500 per policy. That translates into potential earnings for the broker of circa £300 per year and, after the first year, this is all built into a single renewal cycle.” It saves time, too: direct access to local underwriters means decisions will be immediate, and broad cover makes the likelihood of any mid-term adjustments slim.

The advantages are clear
Brokers are already seeing the benefits. “We found that it is much easier to sell an additional product to an existing client, rather than convert brand new customers, and to focus on cover rather than price,” says Paul Woods, Divisional Director at R K Harrison Insurance Services.

Adding a holiday home to the cover can also boost a broker’s income from a given client by anything from 15% to 100%, depending on how grand the property is. “These are existing customers who already know and trust you, so the chances of closing the deal are that much higher,” says Laurent.

Cross-selling can also help you defend your existing business. “Selling a package of different risks enhances retention at the renewal stage and builds a stronger bond with the client,” says Ashley. “If you don’t, someone else may offer our market-leading product before you do.

“For many years, the high net worth market was a business with only one product: household. Cross-selling is not yet a habit among brokers and it is our job is to help them understand the opportunity."